21, March 2021

7 Steps for a Secure and Easy Virtual Data Room Setup

Whether you are fundraising or looking into mergers and acquisitions opportunities, a virtual deal room is the ultimate solution for quick and safe confidential document sharing. Below you will find practical advice and advanced tips on effective data room setup.

Prepare your files and documents

Before you begin to structure a virtual deal room, make sure that all necessary documents and files are in order. In most cases, you will be dealing with both physical and electronic items and they must be handled properly.

Below are a few best practices for working with both.

Physical filesElectronic documents
1. Create scanned copies of all documents. Avoid altering the paper in any way with things such as staples or page dividers. Keep documents as intact as possible to get the best image results.1. Arrange documents in a well-organized folder structure to make the navigation between them smooth and intuitive.
2. When scanning the documents aim for 200 DPI resolution. Try to keep the files at the smallest available size by using a digital compressor if needed.2. Decide on the level of confidentiality for each item. Some documents might be restricted for the top-tier stakeholders, while others are more flexible in terms of access.

You will also make your life a lot easier if you arrange the necessary documentation by two principles:

  • the degree of non-disclosure
  • the order in which it will be required

Deciding on the sequence and the confidentiality early on will save you time and energy once you get to the data room setup.

Once everything is in place for the virtual deal room configuration, you can complete the task in just five simple steps.

7 steps to set up a virtual data room

We have broken down the whole process of setting up a data room into a list of simple and easy-to-understand steps. Let us have a look at them.

Step 1: 1. Register your account

The first step to saving your intellectual property on a virtual data room is to register yourself on a chosen virtual data room services provider. Though the registration process varies from one provider to another, the basic procedure is pretty simple and similar throughout most popular solutions. 

So, to register your account, just follow the below-mentioned steps.

  1. At the start, you have to fill in your personal details. They mainly include your name, email, and cell number.
  2. You have to accept their terms and conditions. So, check the “I agree on terms and conditions” box.
  3. Now, create a strong password. You will also have to create a security question. Remember this security question as it will be used in case you want to reset your password.
  4. Enter your cell number in the right format (as required). Make sure you have added all the correct information.

This way you can register yourself in your chosen virtual data room.

Step 2: Create user groups

How to create groups and add members

Creating a group is not difficult at all. Here the important thing to note is that, there are two types of user permissions for most data rooms.

  • Administrators. Administrators have full control of the virtual data rooms. They can invite users, manage permissions, and view activity reports.
  • Restricted administrators. As the name says, the restricted administrators only have access to restricted controls.

In reality, this feature can be useful to many businesses. This is because, if you want to allow limited access to someone, this restricted mode can be really helpful. 

Restricted administrators can manage only selected user groups. They may be authorized to view or change permissions of the chosen participants and access their activity reports at any time that they want.

What types of users exist?

  • Collaboration users. Collaboration users can see all of their group’s permitted documents, and post notes to files or folders. They are also allowed limited access for collaboration with other user groups in the data room.

    However, if you want them to be able to communicate more than just through messaging on an application then we recommend giving those individuals question-and-answer privileged status so that they may ask questions during Q&A sessions when relevant.
  • Individual users. Individual users have very limited access to the data room. They can view permitted documents, create private notes in files and folders for themselves as well as see their personal activity reports if they are given permission by Q&A coordinators. These permissions are only granted at higher levels within this department or through an external agency.

Step 3: Invite users

How to invite users?

Inviting new users is quite simple. Follow these steps to invite new users to your virtual data room.

  1. You have to click on the “Invite button” user.
  2. Now you have to create a group you want to invite new users to. For this click on the “New group” button.
  3. You can now send individual or bulk invitations to a newly created or an existing group in your virtual data room.

How to edit profiles?

  1. Select the user of which you want to change the profile.
  2. Then you will be displayed different settings that you can change.

Note that some settings of user profiles cannot be changed. This includes their email address and other personal details. However, you can change their data room access rights.

Step 4: Set access permissions

You’ve nearly finished the data room setup process. The next thing you will need to do is upload the documents into th

What types of user permissions could be?

These are available sets of permissions.

  • Set by groups. The “Set by groups” option will show you which groups have been granted access to certain files or folders.
  • Set by folders. The “Set by folders and files” function is great for finding out who’s allowed in on your secrets.
  • Exporting permissions. Permissions are easy to adjust and review with a few clicks. You can also export your permissions for an accurate report on who has what authority in the project.

Step 5: Remember about NDA

Before you share any files within a VDR, it’s important to understand the importance of signing a non-disclosure agreement (NDA) with a party that will be granted access. This will help you ensure high-level protection of confidential materials third-party users and groups will be accessing.

An NDA is basically a contract that protects both parties from sharing confidential information. By signing an NDA, you and your business partners are agreeing not to disclose any information that is shared in the VDR. This includes everything from trade secrets to customer data.

If you or one of your business partners breaches the terms of the NDA, you could face legal penalties. It’s therefore essential to take care when uploading files to a VDR and to only share information that you’re comfortable with being made public.

When choosing a VDR, it’s important to make sure that the provider has a robust security infrastructure in place. This will help ensure that your files are safe and secure from unauthorized access.

Step 6: Upload documents

How could documents be uploaded to data rooms?

When you are working in a virtual data room, you may need to add documents to the system. This can be done in a few different ways, depending on the document and the system.

In many cases, companies can simply upload the document to the virtual data room, or drag and drop it into the interface.

You can also add documents by copying and pasting the link into the virtual data room, or by using a dedicated tool to add them.

Whichever method you choose, make sure that you are adding the correct document to the right place in the system. Otherwise, it can be difficult to find later on.

Which formats could be added to data rooms?

Following are the formats which are widely supported:

  • m4v
  • mpg
  • mxf
  • mkv
  • 3gp
  • mpeg  
  • mp4
  • mov
  • avi
  • wmv
  • ts
  • asf |
  • webm
  • f4v

How to upload documents to the virtual data rooms?

  1. Log into the virtual data room and select the “Upload” tab for uploading your desired document.
  2. Click the “Choose File” button.
  3. Navigate through folders to find the required document file. 
  4. Select it, then click “Open”. That is it.

It is important to note that it does not matter how many files you upload. Their structuring is what really matters. So, arrange them properly to get the best out of your virtual data rooms.

Step 7: Double-check everything

When you are uploading documents to a virtual data room, it’s important to check them for any potential security risks. Here are a few things to keep in mind:

  • Make sure the documents are virus-free.
  • Remove any sensitive information before uploading, like social security numbers or bank account numbers. Or use the Redaction feature built into many data rooms to hide that information when sharing.
  • Check that all files are in the correct format and size to ensure the right data room experience.
  • Verify that the document titles are accurate and descriptive.
  • If you are uploading multiple documents in data rooms, make sure they’re in the correct order.

By taking these precautions, you can help ensure that your highly confidential information remains secure when it’s stored in a virtual data room.

Before you start actively using the virtual data room software

Just before you dive into your virtual deal room setup, here are three final tips on getting the most out of the process.

setting up a virtual data room
  • Avoid using mainstream cloud storage solutions. While most cloud storage is secure enough to hold sensitive data, it might lack the tool versatility required for fast and effective file sharing. Focus on finding specialized data room software for the best result.
  • Test everything before you implement. When you are ready to invite all the members required, use the View As instrument to ensure you granted access permissions properly. The same tool can also help you evaluate the effectiveness of the layout from another angle.
  • Find the right balance between security and simplicity. While your instinct might be to apply extreme safety measures to each item in the room, it can significantly slow down the process and tire out other participants. Put yourself in the shoes of the people in charge of due diligence and make it simple for them to navigate the room, while still keeping sensitive data protected.

The virtual data room setup checklist

In just a few short steps, your virtual deal room is ready to go. As a review, here is a brief summary of all the things to keep in mind.

  • Assemble and organize all the documents and files in advance
  • Find the virtual data room software that meets your requirements
  • Evaluate virtual data room providers by the security and functionality of their platforms
  • Organize the data room as if it was an actual physical space, keeping accessibility and data safety in mind
  • Set appropriate access levels and permissions in security settings
  • Upload the documents, adding watermarks wherever needed
  • Invite all required data room software users
  • Remain in control by adjusting the access settings and retracting the documents when necessary
  • Combine physical NDAs with virtual access agreements upon data room entry
  • Rely on the reporting feature to track user engagement and overall progress

Extra recommendations for setting up virtual data rooms

Compared to physical data rooms, virtual data rooms offer much more flexibility for your business specific needs. So, to help you stay on the safe side, here are some recommendations. 

These tips will help you perform document exchange or share financial statements for nearly any investment opportunity.

1. Remember: Your system requirements matter

To get the best control over your transactions, you need to ensure that your system requirements are in line with your chosen data rooms. So, make sure you have enough memory and processing power to handle the number of users who will be accessing the room simultaneously.

Also, be sure your internet connection is fast and reliable. If you experience any slowdown or glitches, it can be very disruptive to your team’s work. That way you can focus on your business and not worry about your virtual data room as people do for physical data rooms.

2. Configure the data room 

The “General settings” section includes all sorts of options to customize how your project is indexed, encrypted, and maintained. You can figure out all such aspects of your company’s projects.

You can enable/disable automatic document indexing and change what type or size flash drives are used for archiving projects as well as adding contacts that will have access when managing these tasks on an ongoing basis.

3. Consider the integrations available

Most data room services offer integrations with a range of popular apps and services, from communication tools to video conferencing apps, collaboration software, and more.

Another integration worth mentioning is single sign-on. Thanks to it, businesses can enroll their employees in seconds. From there, data room administrators invite users to the project. To join the data room, users simply receive an email with smart links that allow for transparent access without any further registration or authentication process needed. This is very convenient and offers an extra layer of protection.

4. Pay attention to reports tracking activity

 There are plenty of reports available to help you track the reports such as financial records.

  • Groups overview
  • Q&A activity
  • History of actions
  • Data storage usage
  • Folder access
  • Files and folders
  • Groups and users

5. Customize your settings

A virtual data room is a great way to manage and share large volumes of company information. However, to get the most out of your virtual data room experience, it’s important to customize your settings. In particular, make sure you adjust the following:

  • File size limits. Large files can take a long time to upload and may slow down the rest of your virtual data room. To avoid this, be sure to limit the size of your files.
  • Company size limits. If you’re working with a large company, it’s important to select an appropriate data room size. This will ensure that all of your company’s information can be stored in the virtual data room without running out of space. Also, it will enhance the overall efficiency of your data room.
  • Security settings. When configuring your security settings, be sure to select the options that are best suited for your company. This will help keep your data well-protected and safe from the prying eyes.

By adjusting these settings, you can ensure a smooth and productive virtual data room experience.

6. Use watermarking

By watermarking your work, you create a unique identifier for it. If someone tries to use your work without permission, this can help prove that the work is yours. Watermarking also makes it more difficult for someone to steal your property or pass it off as their own.

While watermarking alone will not protect your work from infringement, it is an important step in protecting your rights and can help you prove ownership in the event of a dispute.

Final words

As you have seen, a virtual data room can be an incredibly useful tool for your business. It allows you to keep your information safe and secure while still making it easily accessible to those who need it.

Make sure to take the time to explore all of the features available in your virtual data room and to ask any questions that you may have.

You now also know how to set up a virtual data room without too much effort. The tips we shared will help you figure out those areas which you could otherwise miss.

Remember a clean and secure virtual data room can be the key success factor for your business security. In this regard, one cannot overlook the importance of VDR platforms.